Observed Signal · Sep 15, 2026 · Policy Update · Source: Digiday · Impact: 3/5 · Sentiment: Positive
AI Search Concerns Drive Higher Media Budgets, CMOs Say
Marketers are leveraging concerns about AI search's impact on consumer behavior to justify increased media budgets and brand-building investments. A survey by Dept found 61% of US consumers used AI assistants for shopping research in the past three months. Advertisers in high-consideration categories like insurance, autos, and running shoes are particularly vulnerable to AI-driven shifts in search behavior. Instead of focusing solely on GEO tactics, CMOs are arguing for bigger upper-funnel budgets to shore up brand equity and awareness, which they see as crucial for maintaining visibility in AI-generated results. The IAB revised its US ad spend growth forecast upward to 12.3%, partly due to marketers investing more in AI search performance. Examples include State Farm's sports campaign, Mercedes-Benz's tennis-focused ads, and Hoka's marathon sponsorship.
Highlights shift in media budgeting strategies due to AI search, involving major advertisers and industry-wide implications.
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Key Takeaways & Evidence Grounding
- 61% of US consumers used an AI assistant for shopping research or decisions in the past three months (Dept survey of 2,600 shoppers).
- IAB revised its US ad spend growth forecast upward from 9.5% to 12.3% for this year.
- 44% of buyers say adapting to changing search habits is their top investment challenge (IAB survey).
- Google and Tracksuit published research suggesting high brand awareness correlates with higher 'share' of search.
- State Farm, Mercedes-Benz, and Hoka are running brand campaigns to counter AI search effects.
Connected Companies & Entities
9 Entities mapped“State Farm rolled out a sports-adjacent brand campaign and is using AI search concerns to argue for higher media budgets....”
“A survey by digital agency Dept found that 61% of U.S. consumers used an AI assistant for shopping research....”
“Research published by Google and Tracksuit suggested high brand awareness drives share of search....”
“Gartner analyst Andrew Frank commented on AI making brands more vulnerable....”
“Oliver Williams, head of digital performance at Mediaplus, says the agency recommends clients invest in upper-funnel activities....”
“Mercedes-Benz is running a campaign featuring tennis star Coco Gauff to counteract AI search impacts....”
“The IAB credited increased media spend for AI search performance as pushing up U.S. ad spend and revised growth estimates....”
“Consideration Ads on TikTok have proven popular among brands competing for back-to-school sales....”
“Paid ads on sites like Reddit can serve the aim of improving consideration, noted Jeff Eisenfeld of Media by Mother....”
Ontology Mapping & Concepts
Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
AI Search Fuels Content Budgets Before Media Buys
Marketers are redirecting marketing dollars toward creators, content, agency services and tools to improve how brands are cited inside large language models and AI-generated answers, rather than immediately buying AI-search ads. WPP has forecast AI search advertising will become the fastest-growing channel, but agencies and brands say measurement, attribution and inventory clarity are still unresolved. Examples include Butterball hiring Carmichael Lynch for AI visibility work and Priceline increasing creator and social spend while piloting ChatGPT ads and testing Google AI Max. Agency leaders quoted in the piece argue many brands are prioritizing organic ‘AI visibility’ (optimizing owned and creator content for LLMs) now, while remaining ready to scale paid AI-search placements once ad formats and metrics mature.
Survey: AI Search Rapidly Shifts Marketing Budgets
Branch’s AI Search and Discovery: Enterprise Benchmark Report, based on a survey of 300 enterprise senior marketing executives, finds rapid adoption and budget reallocation toward AI-driven search. Respondents report AI search increased traffic share (15%) while traditional SEO rose 8% year-over-year; 89% said AI search improved overall marketing performance. In 2026, 65% of surveyed teams plan to dedicate at least 25% of marketing budgets to AI search (28% plan >50%), and 87% expect to be selling via AI within the year. The report also highlights notable concerns—data privacy, accuracy, workforce impact and long-term economics—despite broadly positive sentiment.
US Ad Spend Forecast Revised Upward Amid Rising AI Use
The Interactive Advertising Bureau (IAB) has revised its 2026 U.S. ad spend growth forecast to 12.3%, up from 9.5%, citing strong spending around major live events like the Winter Olympics and the World Cup. Research consultancy Madison & Wall projects global ad spend growth of 11% to over $1.3 trillion. Notably, the share of ad dollars directed through AI or automated campaign types, such as Meta's Advantage+ and Google's Performance Max, is set to rise to 12% of U.S. ad spend ($479 billion excluding political), up from 2% in 2023. By 2030, AI-directed spend is expected to reach $158 billion, or 27% of the U.S. ad market. Media agencies report significant client adoption, with some allocating over 50% of search budgets to Performance Max. Platforms like Google and Meta are driving this shift, with Google's AI Max and Performance Max accounting for 30% of search spend, and Meta's Advantage+ on track for $75 billion in annual revenue.
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